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  • Side Effects: Fuzzy Math Won’t Bend the Health Care Cost Curve

    Obamacare will force health care spending to rise faster and higher over the next decade than if Congress had just left the nation’s health system unchanged.  That’s according to a recent report from the Office of the Actuary at the Center for Medicare and Medicaid Services.

    The report projects the new law will inflate national health expenditures by an additional $88.8 billion in 2019 alone. So much for the President’s promise that Obamacare would bend the cost curve down.

    The White House tried to put a happy face on the unwelcome CMS report.  It just goes to show, the Administration claimed, that spending under Obamacare will decrease by $1,000 per insured person.

    That sounds pretty good, but Richard Foster, Medicare’s chief actuary, promptly called the White House numbers “not meaningful.”  Temple mathematics professor John Allen Paulos noted, “It’s not that it’s false, it’s just that it will be a little misleading.”

    Associated Press reporter Ricardo Alonso-Zaldivar explained why:

    “Consider an imaginary country with just three citizens, Peter, Paul and Mary. Peter has health coverage but Paul and Mary are uninsured. Peter spends $1,000 on health care, but Paul and Mary can only afford $500 apiece because they lack coverage. Total national spending: $2,000. National spending per insured person: $2,000.

    Now suppose a law gets passed to expand coverage. Paul gets insurance, but Mary remains uninsured. Now Peter and Paul are spending $1,000 apiece. Paul spends more than when he was uninsured, so total national health spending goes up to $2,500.

    But because more people are covered, spending per insured person goes down to $1,250.”

    Medicare’s Foster says the most meaningful way to assess the new law’s effect on health spending is to look at per capita costs with and without Obamacare.  Without Obamacare, he projects per capita health spending at $13,387 in 2019.  With Obamacare (including its unrealistic assumptions of being able to save money through massive cuts to Medicare) that number rises to $13,652.

    So, it looks like bending the health cost curve down will have to wait for another day—when the Patient Protection and Affordable Care Act is repealed and replaced with real, fiscally responsible reforms.

    Posted in Obamacare [slideshow_deploy]

    5 Responses to Side Effects: Fuzzy Math Won’t Bend the Health Care Cost Curve

    1. Kevin Habib, College says:

      Odd, seems based of reading the first few paragraphs, national helath spending is projected to grow more slowing – at 4.2 percent – 1 full percentage point than previous estimates. Sounds like that's somethign we'd all support, no?

      'Total national health spending is estimated to have grown 5.8 percent in 2009 and to have reached $2.5 trillion (Exhibits 1–4). In 2010, spending is expected to grow by 5.1 percent. These growth rates are 0.1 percentage point and 1.2 percentage points faster, respectively, than previously estimated, because of various changes in law and regulations. For 2011, national health spending is projected to grow more slowly, at 4.2 percent (or 1.0 percentage point slower than our prior projections). '

    2. Leon Lundquist, Dura says:

      Obama's truth bending, number bending, gender bending, exaggeration, prevarication, duplication, can find no part of America that is not worth attacking. American Medicine is the perfect system, arguably, so it takes a lot of baloney to "fix it." That's like the ACLU going after the Boy Scouts! No, dear hearts. The Cost Curve goes up and up. You can't count all the damage this Act will do.

      Fuzzy Math is pretty good, but garbage in garbage out, the whole of Medicine is duplicated in Government. That's a full double! "That's what Doctors need! Two government regulators, each." We need lots and lots and lots of Death Committees. I remind you, Communism always leads to Mass Murder! Comrade.

    3. Billie says:

      personal health is not the government's business. It is the individuals. FREE MARKET HEALTH CARE and free market overseer, as the government proposal, itself and those behind it working in government, are observed to be dishonest and corrupt!

    4. Phyllis Jones, La Pi says:

      The government must back off and give the American people the freedom to succeed or fall on its face. That is the American way and it is the only way

      we know what we are doing is right or wrong. This is a God-given right…to fail.

      Failure is a normal part of life and an effective teacher. Don't take that away from

      me. "Prove all things" must by necessity include some failure. To borrow from

      one famous woman "It's a good thing".

    5. Fran, Brooklyn. NY says:

      I'd like to tell you what has happened with my insurance company since Obamacare was passed. I have a very sick child. From when she was 11 she has experienced 13 surgeries, lung problems, and stomach issues (for which she has a pacemaker to move food out of her stomach). My insurance company has paid for all surgical, medical and prescription costs, including trips to specialist hospitals in Boston, NC and the Mayo Clinic. My daughter is now 25. Since Obamacare has passed, medicines that have been covered for 14 yrs are no longer covered, prescription amounts have been decreased (dr. ordered 300 pills only 240 were covered). And there are no appeals. My daughter turned 25 in October, Obamacare states children are covered until 26. Not in NY. That starts in 2011 which leaves us to pay $615 per mth for coverage until then.

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